A Bollinger Flag. My small contribution
Posted: 20 Jan 2011
Hello
Here is my small contrubution to the forum. An idea that i had around the Bollinger band.
A bollinger band is like a string of saussage. Expend for a while then retract. Good opportunity could be found when Bollinger band retract and trend toward the midline.
My idea was to quantify the period when price retract and period where they attract one each other.
If band turn toward the mid line, I had+1. When band repulse, I sustract -1. The value is then averaged over a given period and resullt is displayed
A green spot, Band attraction, Both Upper and Lower band in direction of the middlemine
A red Spot, Band repulse, Both Upper and Lower band repulse from the other one
A brown spot is when Upper and Lower Band are not in the same direction
What i found:
- An extended period in the Brown spot is a prelude for a move in one direction
- An undisturbed and extended period in the Green spot ( 5 and more) is not good at all . Price as lost a lot of energy and signal are mixed after. Better to wait for the signal to go in the Brown or red spots.
- A period less than 5 in the green spot or if the value = 1 combinned with a setup and timing tool show good opportunity
- A period of 5 and no more than 7 in red spot is a prelude for a counter trend mouvement. Price as extended too much and it want to take a pause.
Unfortunaly, I'm not able to take profit of the information given. If there is some genius that found an utility, or a way to define usable rules with it, please let me know.
Martin
Here is my small contrubution to the forum. An idea that i had around the Bollinger band.
A bollinger band is like a string of saussage. Expend for a while then retract. Good opportunity could be found when Bollinger band retract and trend toward the midline.
My idea was to quantify the period when price retract and period where they attract one each other.
If band turn toward the mid line, I had+1. When band repulse, I sustract -1. The value is then averaged over a given period and resullt is displayed
A green spot, Band attraction, Both Upper and Lower band in direction of the middlemine
A red Spot, Band repulse, Both Upper and Lower band repulse from the other one
A brown spot is when Upper and Lower Band are not in the same direction
What i found:
- An extended period in the Brown spot is a prelude for a move in one direction
- An undisturbed and extended period in the Green spot ( 5 and more) is not good at all . Price as lost a lot of energy and signal are mixed after. Better to wait for the signal to go in the Brown or red spots.
- A period less than 5 in the green spot or if the value = 1 combinned with a setup and timing tool show good opportunity
- A period of 5 and no more than 7 in red spot is a prelude for a counter trend mouvement. Price as extended too much and it want to take a pause.
Unfortunaly, I'm not able to take profit of the information given. If there is some genius that found an utility, or a way to define usable rules with it, please let me know.
Martin